According to news reports, Democratic presidential nominee, Kamala Harris, has abandoned her previous advocacy for “Medicare for all,” and she now supports what is basically continued enhancement of Obama’s Affordable Care Act. This got me thinking about healthcare systems in other countries, and I decided to look into Germany’s highly regarded system.

As in all western European countries, 100 percent of the population is covered by healthcare.  Health insurance in Germany is mandatory.  It is financed by a combination of employer/employee contributions, and there is also a monthly premium for individuals based on income.  The government subsidizes those without the means to pay the premiums and failure to sign up for insurance results in a fine.  With the exception of small co-pays for certain services, no money passes between patients and providers.  Billing is strictly between the government and providers.

There is no equivalent to Medicare or Medicaid.  There are about 100 private companies that provide insurance options, and they are required by law to offer a basic package of benefits.  In addition to all the areas that are commonly covered by insurers in the US, German plans include dental care and hearing aids.  Long term care (i.e., nursing homes) is also covered.  Every patient can access care from any provider at any time, without the bother of determining who is “in plan.”   All premiums are uniform–there is no increased cost, for instance, for age or medical conditions.  In fact, there is no penalty for “pre-existing conditions.”

About 90 percent of the population enjoys the public health plan, while 10 percent can opt for private health insurance.  The latter is more expensive, as providers charge what they will.  Participants qualify for benefits such as private hospitals with amenities like private rooms.  However, they basically pay double for insurance, as they are contributing to the national insurance through employment, even though they are not using the public system.

Cost/Quality

According to data from the United Nations, the cost of medical care in Germany in 2022 was $8,010 per capita.  This is a bit more expensive than other countries in western Europe, but the cost in the United States was $12,555.  As a percentage of Gross Domestic Product, the cost in Germany is 12.6 percent, while in the US it is 16.6 percent.

Ratings of the quality of healthcare systems measure such parameters as infant mortality, overall mortality, health outcomes, risk factors, access to care, administrative efficiency, affordability, and many more.  In an analysis by the Commonwealth Fund, which looked at 11 developed countries, Germany was 5th and the US was last… by a lot (Norway was the best).

Going Forward

Healthcare in the United States remains a political hot potato, and the major parties are divided about strategy to improve healthcare.  The Democrats want universality and the Republicans tend to want to promote the private sector as the means to improve the system.  Although the German system is imperfect (costs are high and rising, for instance), its approach seems to offer both.  It puts healthcare squarely in the private sector, while guaranteeing provision of a certain package of benefits.  Competition among the insurers provides, at least theoretically, price control, and the debate about whom to cover becomes moot in a universal coverage system.  

The US system is deficient in quality and excessive in cost, factors that everyone agrees upon.  A system such as Germany’s should be examined.